Is CMS Proposing That Physicians Cannot Perform a Procedure on Same Day as E&M Encounter in 2027?

Episode Date: September 2, 2026

In this episode of Stark Integrity, host Bob Wade ("Captain Integrity") explores a question that has generated significant discussion among physicians, compliance professionals, and healthcare organizations:

Is CMS moving toward limiting or eliminating separate reimbursement when a physician performs an Evaluation & Management (E/M) service and a procedure on the same day?

While no final prohibition currently exists, the discussion centers on ongoing concerns regarding same-day E/M and procedure billing, the use of Modifier 25, and whether physicians are being reimbursed twice for overlapping work. The issue has important implications for physician compensation, documentation requirements, patient access, and Medicare spending.

The Fundamental Question

At the heart of the debate is a simple concept:

Should Medicare pay separately for an evaluation that is already inherent in performing a procedure?

Virtually every procedure requires some level of assessment before it can be performed. The challenge is determining when the physician's evaluation rises to the level of a significant, separately identifiable service that deserves separate reimbursement.

CMS is increasingly examining whether some same-day E/M and procedure services involve overlapping activities that may already be included in the valuation of the procedure itself.

How Same-Day E/M and Procedure Billing Works Today

Under current Medicare rules, physicians may bill for:

An Evaluation & Management (E/M) service, and

A procedure performed on the same date of service

However, separate payment is generally appropriate only when the E/M service is significant and separately identifiable from the procedure.

The primary mechanism used to support this distinction is Modifier 25.

Modifier 25 tells Medicare that the physician performed work above and beyond the evaluation that is normally included as part of the procedure.

Why Modifier 25 Is Under Scrutiny

Modifier 25 has long been one of the most heavily audited modifiers in healthcare.

CMS and other payors frequently review these claims because:

It often results in additional reimbursement.

It is widely used across numerous specialties.

Documentation frequently fails to support separate payment.

It creates recurring disputes between providers and auditors.

The concern is not necessarily that physicians are intentionally billing incorrectly. Rather, the concern is that physicians, auditors, and regulators may disagree about whether the E/M service truly represents separate work.

The Concept of "Inherent Work"

One of the key themes discussed in this episode is the concept of inherent work.

Many procedures naturally require a physician to perform some level of evaluation before treatment.

Examples include:

Evaluating a skin lesion before performing a biopsy.

Assessing a patient before removing a suspicious mass.

Examining a gastrointestinal condition before performing an intervention during an endoscopy.

Evaluating a painful joint immediately before providing an injection.

The critical question becomes:

Was the physician performing a separate evaluation and management service, or simply the evaluation already required to perform the procedure safely?

That distinction drives reimbursement.

The Physician Perspective

Many physicians argue that separate payment remains appropriate because:

Clinical decision-making often occurs before the procedure.

Alternative treatment options may be discussed.

Risks and benefits must be evaluated.

Additional medical conditions may need to be addressed.

The physician's expertise and judgment have independent value.

From this perspective, the E/M service is not merely procedural preparation, it is a distinct medical service.

The CMS Perspective

CMS appears focused on ensuring that:

Medicare pays accurately.

Duplicate payment does not occur.

Procedure valuations are not unintentionally supplemented by separate E/M reimbursement for the same work.

The agency's concern is whether some encounters involve activities that are already compensated within the procedural payment methodology.

In other words:

If the procedure already includes a certain amount of evaluation work, should Medicare pay for that evaluation a second time?

Potential Impact on Physician Compensation

If CMS ultimately adopts a more restrictive approach, physician compensation could be affected in several ways:

Reduced Reimbursement. Many specialties routinely bill same-day E/M services with procedures. Restricting reimbursement could significantly reduce revenue associated with those encounters.

Increased Documentation Expectations. Physicians may need to provide more extensive support showing independent medical decision-making, separate clinical assessments, additional diagnoses addressed during the encounter, and work beyond what is typically included in the procedure.

Greater Audit Risk. Auditors will likely continue focusing on Modifier 25 utilization, documentation sufficiency, and patterns of same-day billing.

Potential Impact on Patients

Potential benefits may include more accurate Medicare reimbursement, reduced potential for duplicative payment, and lower overall program spending.

Potential disadvantages may include additional return visits, delays in treatment, reduced efficiency in care delivery, and increased inconvenience for patients who prefer evaluation and treatment during the same encounter.

What Compliance Professionals Should Be Doing Now

Healthcare organizations should closely monitor developments in this area.

Practical steps include: reviewing current Modifier 25 usage patterns; auditing same-day E/M and procedure claims; educating physicians on documentation requirements; evaluating specialty-specific billing trends; ensuring documentation clearly demonstrates when an E/M service is separate from the procedure.

Final Thoughts

This episode highlights an important and evolving Medicare policy discussion. CMS is not simply asking whether physicians should be paid for E/M services. Rather, the agency is asking whether certain same-day E/M services represent work that is already compensated through the procedure itself. The result is an ongoing debate over physician judgment, reimbursement accuracy, and patient access.

For compliance professionals, physician leaders, and healthcare organizations, the key takeaway is clear: Modifier 25 claims and same-day E/M/procedure encounters will likely remain an area of heightened scrutiny. Organizations should ensure that their documentation, coding practices, and compliance monitoring processes are prepared for continued regulatory attention.

Click here to listen to this Stark Integrity Podcast Episode: https://podcasts.apple.com/us/podcast/is-cms-proposing-that-physicians-cannot-perform-a/id1588939373?i=1000787297994